Why others are rich — and we are not

Why others are rich — and we are not

Why others are rich – and we are not.by Don Cayo

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When Governor Angus King started to talk about the sad fate of a little business in near home in Maine, I figured he was trying to build empathy with his audience of Maritimers. Certainly all of us have seen too many businesses close. So his point, I thought, was that we’d know how he felt. And that we’d know that he knows how we feel when we see failures on our side of the border.

But it turns out this is a story that we in the Maritimes can relate to only in our dreams. In fact, the governor was about as close as a gracious guest can get to bragging.

The business was a Burger King in southern Maine. And it closed its doors last summer because it couldn’t find anyone to work there. Nobody. Period. People in the region were too busy working at other jobs in other businesses.

The governor’s story, told during a trade mission to Nova Scotia a couple of weeks ago, was an eye-opener. I’d always thought Maine had a lot in common, socially and economically, with the Maritimes, especially New Brunswick. Both are off the beaten track of their national economies. Both are known largely for wood products, fish, potatoes and nice places for tourists to hang out. They’re more or less the same size – Maine is about 20 per cent larger, and only a little more densely populated. So I figured their state and my province were in more or less the same boat.

Not quite. Like the Maritimes, but even more so, Maine is moving into the modern economy with a much wider range of jobs, many of them technology driven. Its impressive success has led to an unemployment rate of about two per cent in southern Maine. And in the rustic north, which causes many Mainers shake their heads sadly when they think about the depressed economy up there, about 8.5 per cent of workers can’t find jobs.

In other words, their most hard-done-by communities are performing more or less on par with our most vibrant ones.

So what do they know that we don’t?

I put the question to my colleague, Fred McMahon, the senior policy analyst at the think-tank where I work. He’s been globe-trotting for a year, seeking out places that have turned around flat economies, and investigating how they do it.

“Why ask about Maine?” he said. “There are lots of other places that have figured out how to get even better performance out of economies that used to look a lot like ours.”

Fred would rather talk about places like Ireland or the state of Georgia – long-time basket-case economies that have suddenly become the envy of the world. Places that, like the Maritimes, used to be backwaters primarily known for sending people down the road to make their livings elsewhere. And places that, unlike the Maritimes, are now a magnet for investment and jobs and eager young workers flooding in from somewhere else.

If they can do it, why can’t we?

The answer is, we very likely can. If – and this is a big if – we’re prepared to abandon failed policies of the past and embrace vastly more promising ones for the future. And if, for once, we’re prepared to finish what we start. To stick for the long haul with a good set of fundamentals, rather than changing direction with every premiers or, as it sometimes seems is the case, every shift in the direction of the wind.

To that end AIMS, our think-tank, is assembling groups of some of the key players from several states and countries that have turned their economies around. We’ve teamed up with the Atlantic Provinces Chamber of Commerce for a big conference on successful development strategies, to be held in Halifax May 6-8.

What interests me a lot about these people and the successful places they come from is not only what their policy approaches have in common, but also how in some key respects they differ. The Americans who’ll be coming to Halifax operate in what is about as close to a free market economy as you can get in the modern world. The Irish and, especially, the Dutch business and labour people who’ll be explaining the success of the Netherlands’ economy, do not. They’re applying a lot of free market tools, to be sure, but they’re doing so in a context of approaches to governance that are unique to their own countries.

The governing Dutch party, for example, is to the left of most governments in Canada, and the Irish have learned how to make their powerful trade unions a key part of their development strategy.

Those countries, I think, may have some particularly valuable lessons for Canada, a country where voters so often vacillate between left and right. We seem to spurn on one hand anything that emulates the U.S. too closely, and on the other hand be wary of the insensitivity, if not the hostility, of our political left to business and the growth it brings. What these lessons mean is that there is a middle way, one that could allow us to choose substantial elements of the best of both worlds and apply them in the way that suits us best.

Don Cayo is on leave from The Telegraph Journal in Saint John, N.B., to serve a two-year term as president of the Atlantic Institute for Market Studies. He can be reached by e-mail at doncayo@aims.ca.